Spokane Journal of Business

Coldwater Creek plans 12 stores

Retailer already has leased three sites for growth spurt expected in next fiscal year

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Sandpoint-based retailer Coldwater Creek Inc. expects to open a dozen stores in its next fiscal year, which starts in March.

The planned outlets will more than double the number of retail stores operated by the big mail-order and e-commerce company, which sent out its first catalog in 1984 and burst onto the Internet in 1999. Coldwater Creek now operates 10 stores, six of which it opened last year.

Coldwater Creek already has leased space for three of the planned new stores, in Salt Lake City; Aspen Grove, Colo., which is south of Denver; and Sagemore, N.J., which is near Camden, N.J., just across the Delaware River from Philadelphia. The Salt Lake City and Aspen Grove stores are scheduled to open by fall, says company spokesman David Gunter. The company hasnt set an opening date for the Sagemore store, he says.

The three new stores, which will be similar to those opened last year, will have between 7,000 and 8,000 square feet of floor space, and each will employ 40 to 45 people, Gunter says. All of the locations will feature a waterfall, ambient lighting, and natural materials such as slate tiles and wood.

We have a very effective, efficient model for our stores and a look that customers love, Gunter says.

Coldwater Creeks most recent quarterly report filed with the U.S Securities and Exchange Commission says that lease improvements and initial inventory for the new stores will cost between $1.5 million and $2 million.

The rash of new stores departs from Coldwater Creeks original vision of having a few stores in resort destinations, which was the companys goal when it opened its first store outside Sandpoint, in Jackson Hole, Wyo. Gunter says that as the company grew, it recognized the sense in having more, smaller stores in urban areas where its customers live, and in late 1999, opened its first metropolitan shops in Seattle and Kansas City.

One year ago, we were inventing the wheel, he says, of store-development plans. Now, were just rolling along.

Coldwater Creek continues to target some 80 sites in 29 states as possible locations for new stores, and remains committed to the growth of its network of stores, Gunter says.

The company identifies potential store sites by analyzing its database of catalog and Internet customers to find places that already have a high concentration of Coldwater Creek customers, Gunter says.

Thats something that traditional brick-and-mortar retailers dont have when they are planning to expand into new markets, Gunter says.

He says Coldwater Creek also selects inventory for its stores based on what items are selling well from its catalogs and e-commerce sites.

All of Coldwater Creeks stores are performing at or above the companys expectations, Gunter says. The companys latest quarterly report says the stores annual sales average about $500 per square foot.

In Coldwater Creeks most-recent fiscal quarter, ended Nov. 25, it reported a 36.2 percent jump in net income, to $7.1 million, compared with the year-earlier period. Net sales for the quarter climbed 22.2 percent to $123.7 million.

Coldwater Creeks common shares, which are traded on the Nasdaq system, have been climbing in price in recent weeks to the mid-30s. They were trading earlier this week at about $36 a share. Analysts currently are recommending the shares as a moderate to strong buy.

The company employs about 2,100 people nationwide. It launched its e-commerce operations in July 1999, and that part of its business accounted for 25.8 percent of the companys overall sales in its most-recent quarter.

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